Dear TurboSquid Artists,
We’ve been at this together for nearly 20 years. Our 20th anniversary is actually April 1st of this year, a birthday that was always funny because it lands on April Fools’ Day, when jokes and pranks are traditional. Obviously, this year there is no joke, and no celebratory party. I want to share what we’re seeing, and give you a sense of what is real.
Firstly, TurboSquid staff are all working, and working remotely. We don’t have any known cases of the virus among our staff, and we should be at as close to 100% capacity as possible, given of course that we are not able to have in person discussions and so on. We will be able to process payments, transactions, and everything else to keep your income flowing normally.
There is near certainty the world is heading for a global recession. This has both a supply shock (factories are closed) and a demand shock (people are reducing their buying, there will be no travel/entertainment spending, and few purchases of durable goods will be made like sofas, cars, etc., that people don’t have to buy). The global economy should recover much more quickly than the Great Recession, but we are in unknown territory for what will happen between now and when the virus has played out.
Up until last week, TurboSquid saw no impact on sales other than China, which was down significantly and is now coming back, although relatively, China is not a huge part of our sales. We routinely forecast our revenue (including growth), and started seeing some numbers below that forecast starting last Thursday, March 12th. It’s too soon to know what this means because of the massive transition to working from home for so many people, and the consumption of news and distractions from work we are all dealing with.
Any fluctuations in your sales before March 12 should be just randomness in the market. If you are seeing anything catastrophic or significant, it is highly probable that it is just randomness in the data. This always pains us, but somebody is always having the worst month of sales they’ve ever had, while somebody else is having the best month. For the marketplace as a whole, Monday ended up 8% below our forecast. As I’m writing, Tuesday is up over forecast. Asia is doing well, Europe is down, and the US is way down.
All of this is to say that there are many moving parts, but in the coming months we all have to expect our sales to decline from what we expected. We are watching everything that we can, but that is the most likely reality.
Some good news is that our partners in China tell us that life is pretty much back to normal. Everyone wears masks at work, and you can eat-in at restaurants. That was after a 2-month lockdown with an extremely effective and powerful central government that has little friction in getting what they need done. The democratic structures of many Western governments will not be as effective, and the virus will likely take longer to get under control. But it will get there.
More good news is that all of us here do computer-based work, and we will not see a total collapse. Some industries should be fine (games), and some will stop (movies will have a hard time shooting, for example). When these slowdowns will hit is anyone’s guess… movies in post-production can probably continue, for example, but that pipeline will only last so long. The TurboSquid customer base is extremely diverse, including more than half of the Fortune 100 companies. But people will be very budget conscious. There is no way to predict the timing here.
A blessing to hold on to is that our community is better positioned than most. All of the staff are grateful for that, and I have received messages that many of you feel lucky in the same way. I think about everyone that depends on TurboSquid, and we want to be there to help us all go through this as safely and securely as possible.
TurboSquid survived Hurricane Katrina here in our home city in New Orleans, and this is extremely similar in many ways, but at global scale. We will get through it, and life will resume normalcy, but we will live life day by day and then week by week for a long time without knowing what is next. “Corona” and “COVID” will become terms we are unbelievably tired of hearing and talking about. Everyone will have an impact, and it will be something we all have in common. Sooner or later, though, we will be on the other side of it.
Take care of yourselves, your families, and encourage everyone to make safe decisions. I’ll share more as time goes by.
Matt